A couple days ago I caught Microsoft’s PR announcement in their blog about the company catering to SMBs with an interesting proposition: a membership that has Technology-as-a-Service written all over it. Microsoft is touting a new way of buying a PC, by not buying it at all.
-Microsoft’s blog post here.
I dug a little deeper to learn that Microsoft has already quietly debuted a Surface Membership program months before. A program where people lease their devices, trade them in after 2-3 years, get new devices and continue the cycle. Effectively always having the latest tech, just like leasing a new car. There’s technical support included (even ADH), and there are about 100 Microsoft Stores around the country to chip in from the B&M side with newly built SMB zones. Their new SMB initiative is a partnership with Dell to bring the TaaS model to the business masses.
Could Microsoft be leading the way by taking tech ownership out of the equation and capitalizing further on the subscription model that has fared so well for them? Could this as Microsoft says Accelerate Your Business?
The devil is in the details, so I dug a little deeper. Leasing is a money game, so it’s the financing that will make or break a new initiative. Microsoft’s offerings for commercial PCs are simple, just 3 devices, and 3 monthly plans at $25, $35, and $60 month. The cash price equivalents are $899, $1299, and $2199. Doing the math, it turns out that there’s an implied NEGATIVE interest rate of -3.3% by choosing to lease your device. So it’s cheaper to lease than to buy, cool. This is likely thanks to Dell’s Financial Services group and whatever discounts/deals were brokered between the two. It does feel like a pretty good deal.
As governments around the world would agree, cheap money offers the best kick to SMB sector company growth. With Microsoft and Dell leading the charge in the tech world aimed at SMBs, and with the same cheap lending approach, I think it’s a move in the right direction. TaaS could very well become the norm, for businesses (maybe even for your average consumer), and drive the engine for a new era in tech financing that everybody can benefit from.